TRAI releases recommendations on License Fee and Policy Matters of DTH Services

Bhubaneswar: Telecom Regulatory Authority of India (TRAI) has today issued the recommendations on “License Fee and Policy Matters of DTH Services”. The Ministry of Information and Broadcasting (MIB), vide letter No. 2/33/2021-BP&L dated 02.02.2022, sought recommendations of TRAI under Section (11)(1)(a) of the TRAI Act, 1997.

The reference alluded to the amendments carried out by Department of Telecommunications (DoT) in Unified License (UL) Agreement. Vide the amendments dated 25.10.2021 and 06.10.2021, DoT has rationalized the definition of Adjusted Gross Revenue (AGR) and Bank Guarantee (BG) quantum respectively under structural reforms.

The DTH operation in India is governed by the policy guidelines for obtaining license for providing DTH broadcasting services in India. These guidelines prescribe a License Fee (LF). LF is a non-tax fee levied on a service provider against the privilege of being permitted to carry out a licensed activity. As per the provisions of the guidelines, the DTH operators are required to pay a LF, which is 8% of Adjusted Gross Revenue (AGR) on a quarterly basis to MIB.

Bank Guarantee (BG) is a type of financial instrument to ensure that a service provider pay their dues on time and are obligated to fulfil the terms and conditions of the license agreement. The extant DTH guidelines prescribe a BG for an amount of Rs 5 crore for the first two quarters, and thereafter, for an amount equivalent to LF for two quarters and other dues not otherwise securitized.

Based on the reference, a Consultation paper on “License Fee and Policy Matters of DTH Services” was issued by TRAI on 13th January 2023. Written comments and counter-comments on the Consultation Paper were invited from the stakeholders by 27th February 2023 and 13th March 2023 respectively. The Authority received 07 comments and 1 counter-comment from various stakeholders. All these comments and counter-comment are available on TRAI website www.trai.gov.in. An Open House Discussion was also convened on the issues raised in the Consultation Paper on 20th April 2023 through video conferencing.